Judging by the Occupy national gathering in Philadelphia this week, the Middle Ages is making a comeback. In the shadow of Independence Hall, America's secular Bethlehem, hundreds of pilgrims gathered here for a five-day festival of democracy culminating in night-time procession around the manors of power on the nation's high holy day, 4 July.

By day, in downtown's Franklin Square, an Occupy burgh popped up, complete with jugglers, acrobats, dancers and poets. Minstrels from the "guitarmy" belted out Occupy ballads. Itinerant preachers of socialist, liberal, conservative and anarchist faith spread the Occupy gospel. The "mic check" acted as the town crier. Colored banners signaled to the commoners where to join their humble village of origin – the Southwest, New England, Mid-Atlantic and so on. Activist nobles such as Medea Benjamin and Lisa Fithian circulated among the unwashed. Artisans crafted signs and peddled T-shirts, buttons and stickers.

The colorful semi-mystical gathering – among the faithful, Occupy has near-magical powers – recalled why it captured the imagination. There is no public space in which Americans of all types, income and opinions can talk, play and live together. The carnival spirit of Occupy flourished and the night-time curfew kept the decay and drugs at bay that burdened so many other occupations. The "king's men" kept a low profile in Franklin Square, but police materialized the instant a procession exited the park.

Months earlier, word of the gathering spread throughout the land, but barely 500 people made the journey from distant realms. Some confided they were disappointed by the turnout, but the true believers still see Occupy as their and the country's last, best hope. Alexis Terry, a homeless and unemployed transgendered African-American woman from New Haven, home to Yale University, says Occupy "has given me tangible hope for the first time in my life". Billy Lolos from Tucson, whose stage-three emphysema didn't deter him from puffing on cigarettes, says he was "unemployed, living in his sister's house" before the movement appeared. Jeanine Molloff, a speech pathologist from St Louis, passionately called on Occupiers to work for universal healthcare and education, explaining that her 49-year-old brother "died a hideous death last year, and I think the system murdered him."

Nonetheless, the hundreds of thousands who participated in Occupy protests last fall did not trek to Philadelphia. There is no one reason why it has submerged back into the middle-class discontent from which it sprang, but this Philadelphia scene does reveal why the movement has faded.

On Monday afternoon, I entered the park with two friends and we were greeted by Sage. Bare-chested, sitting on the grass, he yelled out to us, "I don't like you." His object of anger was Gregg, one of the nicest people from Occupy Wall Street. Sage continued, "Actually, I like you just fine. You taste sweet. It's the effects of what you do that I don't like." Mild words were exchanged and we quickened our pace. But Sage was not to be denied. Flying in from our left flank, he planted himself in front of us, babbling about "double sarcasm". Gregg asked to be left alone, but Sage deftly claimed he was being denied his right to speak.

It's unfair to blame Sage, who claims he was "born in a mental hospital". Virtually every occupation was beset by the same types, though New York seemed to have a surplus. Nonetheless, one seasoned Occupy organizer, by way of the Middle East, does blame the wayward behavior of a minority for "destroying Occupy as a functioning entity". He claims after the eviction of the Zuccotti Park occupation last November, there would be meetings of up to 300 people groping for a path going forward, but constant disruptions would "suck the energy out of the room".

The Middle East organizer mentioned that in Tahrir Square, Egyptians would surround provocateurs and disrupters (both of the voluntary and involuntary kind) chase them out of the square. If they came back, then a beating was in order. He said, "While it's a different political culture, the Egyptians and Syrians have had to deal with people shooting them from windows. Occupy Wall Street couldn't even deal with a few crazies."

That moment in Franklin Square encapsulated why Occupy Wall Street crumbled. It was not – and still is not – able to negotiate between conflicting rights. Occupy's child-like view of politics – how consensus and participatory democracy will free the angels within every one of us – was a big reason for its success because it offered a palpable alternative to our cynical, acquisitive society. Yet it apparently hasn't dawned on the hive mind that it is impossible to satisfy all rights, every time, everywhere.

It follows that democracy is not just about compromise; it's also about conflict. Politics is about picking winners and losers according to higher principles like justice and equality. Occupy is still present in campaigns, from labor and immigrant solidarity to home foreclosure defense, student debt and the environment. But, for the idealistic core of Occupy, its original flowering was like a Fourth of July firework display: something dramatic and beautiful, but ultimately ephemeral.